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Home  Newsletter Archive  April/May 2001


Market Report: Korea
Analysis of softwood and log imports

Latest Timber Headlines
Fresh industry news

Canada: Softwood industry gives up on envoy plan
Few tears from lumber producers

Profit, sales income down
The Timber Company Q1 results out

UK: 'Jewel in the Crown' certified
FSC approve Crown Estate

Timber Jokes
Tickle your funny bone

Paul Harris
Tel: 44(0)1473 632636
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Market Report - Korea

Korea's total imports of tropical hardwood logs during 2000 is now estimated to have been 938,308 cubic metres - 17 per cent down on the 1,132,019 cubic metres imported in 1999.

Volumes from Papua New Guinea fell to 315,725 cubic metres and from Malaysia to 319,731 cubic metres, but imports from the Solomon Islands increased to 133,174 cubic metres (up by 35% in volume terms).

Most of the hardwood producing countries are still experiencing monsoon weather, so stocks of logs are almost sold out and producer log ponds are low on stocks, according to Korean buyers. However, none of the Korean buyers seem too worried over this as they are in no rush to place contracts and the prices for March/April shipment are reported as being down sharply.

Due to poor demand from the domestic construction sector, domestic sales and prices remain far below the landed log cost, a situation worsened by the strong US dollar. Most of the importers are refraining from placing contracts for new shipments even though stock level in Korea are low.

Solomon shippers offer Dillenia at US$95-100 per cubic metre, Terminallia at US$97, Campnosperma at US$85-90 and Mixed red at US$75-80 FOB for March/April shipment, but not many fresh logs are available due to the heavy and continuous rains that are hampering logging.

Papua New Guinea suppliers are also in a similar position to Solomon shippers. Bad weather continues and most log camps have many low grade (old cut) logs but not many fresh cut logs, and while the offer price is now around US$80 for G-4 fresh logs, prices for low grade logs have dropped to about US$60 per cubic metre.

The Korean softwood market has reportedly been in chaos since early March.

Softwood importers expected a recovery in demand from March to coincide with the spring construction season but the construction market changed direction and continued to cool down further in March.

Stocks of New Zealand Radiata logs were around 100,000 cubic metres at the end of February and another 60,000 cubic metres was on its way to Korea.

Several shippers in New Zealand end their fiscal year at the end of March and they wanted to ship out as much as possible before the end of fiscal year, but analysts say the Korean market was unwilling to accept this volume because of the very poor market conditions.

For this reason, prices for the March shipments were very confusing.

Korean production of plywood in January was sharply down by 17.5% from December to 46,653 cubic metres because mills operated only 16-17days per month due to the poor market. Production of Particleboard also dropped to 47,237 cubic metres, down by 21%. MDF production fell to 68,111 cubic metres, down by 4%.

Imports of plywood in 2000 total 936,866 cubic metres, which is 25% up from levels in 1999 and 25% more than total domestic production in the year. Volumes imported from China increased tremendously in 2000 and reached a high of 168,037 cubic metres lifting China to third place in the list of suppliers after Indonesia and Malaysia.

Imports of MDF in 2000 were 305,388 cubic metres, an increase of 78% from the previous year and the imports of soft veneer also jumped to 173,007 cubic metres up by 63% increasing from 1999.

While imports of Particleboard increased in 2000 to 554,527 cubic metres, up by 25% on 1999, imports of sawnwood dropped to 745,968 cubic metres down by 20% from the previous year.

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Canada/UK: Unique rainforest protection agreed by government, forest products companies and First Nations
The signing of a unique agreement to protect temperate rainforest in British Columbia will help forest products companies address challenges across the international lumber markets, including pressures for timber certification, it was announced yesterday.

USA: Louisiana Pacific posts loss, reduces staff
Building materials company Louisiana-Pacific Corp. reported a first-quarter loss on Tuesday and said it had reduced its work force by about 15 percent since last summer as the timber industry battles low prices and high energy costs.

Canada: 500 jobs to go as Interfor downsizes logging operations and shuts mill
International Forest Products is to downsize its coastal woodlands operations and permanently close its Fraser Mills manufacturing units due to a key government land use decision.

Finland: Nordic papermakers to post weak first quarter profits
Nordic forest industry groups are expected to post lower first-quarter profits this week, on the heels of their North American rivals, reflecting a sputtering global economy, analysts said.

Indonesia: Jakarta says fails to meet donor forestry demands
Indonesia's new forestry minister said the government has failed to fulfil promises to major international donors on forestry projects because the pledges were unrealistic.

China: CITIC to buy 9.43 per cent of South East Asia Wood
Plywood and sawn timber company South East Asia Wood Industries Holdings said on Monday China International Trust and Investment Corp (CITIC) had agreed to pay HK$150 million for about 9.43 percent of the company.

Canada: Softwood industry gives up on envoy plan

Western Canadian lumber producers, who had suggested using special envoys to end the timber dispute with the United States, are now shedding few tears at the idea's apparent death.

The Canadians want "industry-to-industry" talks with their U.S. counterparts in the dispute over softwood lumber - a key commodity in the house building industry - but said on Monday it is now too late for the envoy idea to solve the dispute.

USA: Q1 profits down at The Timber Company

The Timber Company announced today net income and profits for the first quarter of 2001 that are dramatically down on the same quarter last year, due to a weak demand for solid wood and paper products.

The Company, which sells timber and manages 4.7 million acres of timberland, posted a net income of $22 million compared with $40 million for the same period in 2000.

Operating profits for first quarter 2001 were $47 million versus first quarter 2000 operating profits of $75 million. Sales during first quarter 2001 were down 11 percent to $91 million compared with $102 million in first quarter 2000.

In a statement, President and CEO Donald L. Glass said: "Our first quarter results reflected the weak conditions in the forest products industry during the first quarter.

"More recently, however, we have seen some encouraging signs of improvement in solid wood products markets which should lead to stronger log demand and pricing as the year progresses.

"First quarter comparisons were affected primarily by two factors. First, sales were lower, most notably because of widespread downtime and log inventory reductions by our customers, including Georgia-Pacific Group, in response to weak demand for solid wood and paper products.

“While our volumes and prices were lower than a year ago, we successfully kept first quarter 2001 prices for sawtimber and pulpwood essentially flat with fourth quarter 2000 levels, despite sharply lower mill operating rates.

"Second, gains from our ongoing tactical land sales and exchanges were $4 million in first quarter 2001, down from $10 million during first quarter 2000. Our land sales gains can vary significantly from quarter to quarter because of the varied timing of transaction closings. While it is difficult to estimate quarterly land sale gains, our target is to generate income in the $35-$60 million range this year.

"Current log inventory levels at mills in our operating basins are well below normal. This bodes well for a stronger second half as we view the first quarter as the low point of the year.

"As a result of weak demand in the first quarter, we again strategically deferred some harvests until later in the year. Looking ahead, we will stay disciplined in managing our harvest levels during difficult market conditions to ensure we maximize the value of our forests. We are positioned to take full advantage of changing local market conditions and are focused on preserving our long-term timber values.”

UK: Jewel in the Crown certified

The UK’s Crown Estate woodlands and forests – including those containing a great oak rumoured to have been planted by William the Conqueror – have been certified by the Forest Stewardship Council (FSC).

The 9,680 hectares of Crown Estate forests were approved as being managed in a responsible way that benefits the trees, the other wildlife and the people who use the forests.

FSC-UK Director Anna Jenkins said: “We are delighted to announce the Crown Estate's FSC certification. The diversity and richness of species gives these woodlands special importance and the trees are a unique record of history.

“Every forest certified by the FSC is significant but you could say that these are the jewels in the FSC's UK crown.”

The Crown Estate is the largest commercial rural landowner in the UK with a total of almost 160,000 hectares, in addition to extensive urban and marine holdings.

Christopher Bourchier, Head of the Crown Estate's rural department, said: “Certification has focused our forestry management practices and it is our policy to develop sustainable forests with enhanced wildlife habitats and improved woodland landscapes.”

The FSC is an independent, non-profit, non-governmental organisation. Its main activity is to accredit organisations which certify the quality of forest management. The FSC promotes environmentally appropriate, socially beneficial and economically viable management of the world's forests through its timber products label.

The Crown Estate’s forestry department manages Royal forests in Windsor Great Park as well as woodlands in Dunster, Somerset and in Scotland at Glenlivet and Applegirth. They use methods including the creation of wildlife corridors and dead-wood habitats to ensure the future of a rich diversity of wildlife.

The Crown Estate's foresters also look after the largest number of veteran oaks found on a single estate in Europe, as well as trees commemorating monarchs and others planted by visiting royalty, presidents and heads of state. Many areas are designated as Sites of Special Scientific Interest.

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Just for a Laugh

Lumberjack Jon was pushing a tree through the buzz saw and accidentally sheared off all ten of his fingers.

He rushed to the emergency room in agony. The doctor, looking on in disguist, asked the bloody-handed victim for the pile of fingers.

"I haven't got the fingers,'' yelped Jon.

"What do you mean you haven't got the fingers?" replied the doctor. "It's the year 2001. We've got microsurgery and all kinds of incredible techniques. I could have put them back on and made you like new. Why didn't you bring the fingers?''

"But, but...I couldn't pick 'em up."

Send us your jokes (no rude ones please). All jokes published will receive a prize.

Email them today to: news@timberweb.com

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